Some may continue to charge £190 an hour, but the price dealers charge to fix your car is falling for the first time as they fight for customers in the credit crunch economy.

After years of soaring prices from franchised dealers, the latest Warranty Direct Labour Rates Survey shows that the average rate charged for an hour of a mechanic’s time has fallen by 4.8 percent to £90.16 an hour in the last 12 months. Over the same period, cheaper independent workshops have recorded a marginal increase of 0.8 percent, taking their average to £56.10.

Analysis of more than 5,000 garage charges nationwide and repair bills from Warranty Direct’s 50,000 policies suggests franchised dealers have to compete more on price than before, pushing averages down for the first time since Warranty Direct began investigating labour rates in 2004.

The UK’s Garage Labour Rate Average, a combination of franchised and independent garages, now stands at £75.85 an hour.

However, rates vary greatly across the country, with the average in Greater London standing at £94.44 per hour – 54% higher than Cornwall, where the figure is just £61.15.

“The unsustainable increase in franchised dealer rates has hit the buffers,” says Warranty Direct’s Duncan McClure Fisher. “It’s like house prices – the way some workshops were increasing their charges year after year couldn’t continue. Even so, you could still be charged as much as £190 an hour if you’re not careful. Motorists should shop around for the best rate – there’s no need to be stung this badly.”

After labour rates peaked at £198.86 per hour in 2008, the highest now stands at £190.35.